CMS Pub. 100-04, ch. 4, § 250.2

Services Plus 115 percent Fee Schedule Payment for Professional

Services

(Rev. 3019, Issued: 08-07-14, Effective: 01-01-12, ICD-10: Upon Implementation of ICD- 10, Implementation: 09-08-14, ICD-10: Upon Implementation of ICD- 10)

The BIPA legislation on payment for professional services at 115 percent of what would

otherwise be paid under the fee schedule is effective for services furnished on or after

July 1, 2001. A CAH may elect to be paid for outpatient services in any cost reporting

period under this method by filing a written election with the A/B MAC (A) on an annual

basis at least 30 days before start of the Cost Reporting period to which the election

applies. An election of this payment method, once made for a cost reporting period,

remains in effect for all of that period for the CAH.

Effective for cost reporting periods beginning on or after October 1, 2010 if a CAH

elected the optional method for its most recent cost reporting period beginning before

October 1, 2010 or chooses to elect the optional method on or after October 1, 2010, that

election remains in place until it is terminated, an annual election is no longer required.

If a CAH elects the optional method on or after October 1, 2010, it must submit its

request in writing to its A/B MAC (A) at least 30 days before the start of the first cost

reporting period for which the election is effective. That election will not terminate

unless the CAH submits a termination request to its A/B MAC (A) at least 30 days before

the start of its next cost reporting period.

The Medicare Prescription Drugs, Improvement, and Modernization Act (MMA) of

2003, changed the requirement that each practitioner rendering a service at a CAH that

has elected the optional method, reassign their billing rights to that CAH. This provision

allows each practitioner to choose whether to reassign billing rights to the CAH or file

claims for professional services through their A/B MAC (B). The reassignment will

remain in effect for that entire cost reporting period.

The individual practitioner must certify, using the Form CMS-855R, if he/she wishes to

reassign their billing rights. The CAH must then forward a copy of Form CMS-855R to

the A/B MAC (A), and the A/B MACs (B) must have the practitioner sign an attestation

that clearly states that the practitioner will not bill the A/B MAC (A) or A/B MAC (B)

for any services rendered at the CAH once the reassignment has been given to the CAH.

This “attestation” will remain at the CAH.

For CAHs that elected the optional method before November 1, 2003, the provision is

effective beginning on or after July 1, 2001. For CAHs electing the optional method on

or after November 1, 2003, the provision is effective for cost reporting periods beginning

on or after July 1, 2004. Under this election, a CAH will receive payment from their A/B

MAC (A) for professional services furnished in that CAH’s outpatient department.

Professional services are those furnished by all licensed professionals who otherwise

would be entitled to bill the A/B MAC (B) under Part B.

Payment to the CAH for each outpatient visit (reassigned billing) will be the sum of the

following:

• For facility services, not including physician or other practitioner services, payment

will be based on 101 percent of the reasonable costs of the services. List the facility

service(s) rendered to outpatients using the appropriate revenue code. The A/B

MAC will pay 101 percent of the reasonable costs for the outpatient services less

applicable Part B deductible and coinsurance amounts, plus:

• Show the professional services separately, along with the appropriate HCPCS code

(physician or other practitioner) in one of the following revenue codes - 096X,

097X, or 098X.

The A/B MAC (A) uses the Medicare Physician Fee Schedule (MPFS) amounts to pay

for all the physician/nonphysician practitioner services rendered in a CAH that elected

the optional method. Payment is based on the lesser of the actual charge or the facility-specific MPFS amount less deductible and coinsurance times 1.15; and

• AK - Service rendered in a CAH by a non-participating physician

For a non-participating physician service, a CAH must place modifier AK on the

claim. Payment is based on the lesser of the actual charge or a reduced fee

schedule amount of 95 percent. Payment is calculated as follows:

• [(facility-specific MPFS amount times the non-participating physician

reduction (0.95) minus (deductible and coinsurance] times 1.15.

• GF - Services rendered by a nurse practitioner (NP), clinical nurse specialist

(CNS), or physician assistant (PA)

GF - Services rendered in a CAH by a nurse practitioner (NP), clinical nurse

specialist (CNS), certified registered nurse (CRN) or physician assistant (PA). (The

“GF” modifier is not to be used for CRNA services. If a claim is received and it has

the “GF” modifier for certified registered nurse anesthetist (CRNA) services, the

claim is returned to the provider.) Also, while this national “GF” modifier includes

CRNs, there is no benefit under Medicare law that authorizes payment to CRNs for

their services. Accordingly, if a claim is received and it has the “GF” modifier for

CRN services, no Medicare payment should be made.

Services billed with the “GF” modifier are paid based on the lesser of the actual

charge or a reduced fee schedule amount of 85 percent. Payment is calculated as

follows:

• [(facility-specific MPFS amount times the nonphysician practitioner

services reduction (0.85) minus (deductible and coinsurance)] times 1.15.

• SB - Services rendered in a CAH by a certified nurse-midwife

For dates of service prior to January 1, 2011, certified nurse-midwife services

billed with the “SB” modifier are paid based on the lesser of the actual charge or a

reduced fee schedule amount of 65 percent. Payment is calculated as follows:

For dates of service on or after January 1, 2011, Medicare covers the services of a

certified nurse-midwife. The “SB” modifier is used to bill for the services and

payment is based on the lesser of the actual charge or 100 percent of the MPFS.

MPFS Payment is calculated as follows:

• [(facility-specific MPFS amount) minus (deductible and coinsurance)]

times 1.15.

• AH - Services rendered in a CAH by a clinical psychologist

Payment for the services of a clinical psychologist is based on the lesser of the

actual charge or 100 percent of the MPFS. Payment is calculated as follows:

• [(facility-specific MPFS amount) minus (deductible and coinsurance)]

times 1.15.

• AE - Services rendered in a CAH by a nutrition professional/registered

dietitian.

Services billed with the “AE” modifier are paid based on the lesser of the actual

charge or a reduced fee schedule amount of 85 percent. Payment is calculated as

follows:

• [(facility-specific MPFS amount times the registered dietitian reduction

(0.85) minus (deductible and coinsurance)] times 1.15.

Outpatient services, including ASC type services, rendered in an all-inclusive rate

provider should be billed using the 85X type of bill (TOB). Non-patient laboratory

specimens are billed on TOB 14X.

MPFS rates contained in the HHH abstract file are used for payment of all

physician/professional services rendered in a CAH that has elected the optional method.

If a HCPCS code has a facility rate and a non-facility rate, the facility rate is paid. See

Chapter 23 of Pub. 100-04, section 50.1 for the record layout for the HHH abstract file.

Physician Fee Schedule Payment Policy Indicator File

The information on the Physician Fee Schedule Payment Policy Indicator file is used to

identify endoscopic base codes, payment policy indicators, global surgery indicators,

diagnostic imaging family indicators, or the preoperative, intraoperative and

postoperative percentages that are needed to determine if payment adjustment rules apply

to a specific CPT code and the associated pricing modifier(s). See Chapter 12 of Pub.

100-04 for more information on payment policy indicators and payment adjustment rules.

See Chapter 23 of Pub. 100-04, section 50.6 for the record layout of the Payment Policy

Indicator file.

Health Professional Shortage Area (HPSA) Incentive Payments for Physicians

Section 1833 (m) of the Social Security Act, provides incentive payments for physicians

who furnish services in areas designated as HPSAs under section 332(a)(1)(A) of the

Public Health Service (PHS) Act. This statute recognizes geographic-based, primary

medical care and mental health HPSAs, are areas for receiving a 10 percent bonus

payment. The Health Resources and Services Administration (HRSA), within the

Department of Health & Human Services, is responsible for designating shortage areas.

Physicians, including psychiatrists, who provide covered professional services in a

primary medical care HPSA, are entitled to an incentive payment. In addition,

psychiatrists furnishing services in mental health HPSAs are eligible to receive bonus

payments. The bonus is payable for psychiatric services furnished in either a primary

care HPSA, or a mental health HPSA. Dental HPSAs remain ineligible for the bonus

payment.

Physicians providing services in either rural or urban HPSAs are eligible for a 10 percent

incentive payment. It is not enough for the physician merely to have his/her office or

primary service location in a HPSA, nor must the beneficiary reside in a HPSA, although,

frequently, this will be the case. The key to eligibility is where the service is actually

provided (place of service). For example, a physician providing a service in his/her

office, the patient’s home, or in a hospital, qualifies for the incentive payment as long as

the specific location of the service provision is within an area designed as a HPSA. On

the other hand, a physician may have an office in a HPSA, but go outside the office (and

the designated HPSA area) to provide the service. In this case, the physician would not

be eligible for the incentive payment.

If the CAH electing the Optional Method (Method II) is located within a primary medical

care HPSA, and/or mental health HPSA, the physicians providing (outpatient)

professional services in the CAH are eligible for HPSA physician incentive payments.

Therefore, payments to such a CAH for professional services of physicians in the

outpatient department will be 115 percent times the amount payable under fee schedule

times 110 percent. An approved Optional Method CAH that is located in a HPSA

County should notify you of its HPSA designation in writing. Once you receive the

information, place an indicator on the provider file showing the effective date of the

CAH’s HPSA status. The CMS will furnish quarterly lists of mental health HPSAs to

A/B MACs (A).

The HPSA incentive payment is 10 percent of the amount actually paid, not the approved

amount. Do not include the incentive payment in each claim. Create a utility file so that

you can run your paid claims file for a quarterly log. From this log you will send a

quarterly report to the CAHs for each physician payment, one month following the end of

each quarter. The sum of the “10% of line Reimbursement” column should equal the

payment sent along with the report to the CAH. If any of the claims included on the

report are adjusted, be sure the adjustment also goes to the report. If an adjustment

request is received after the end of the quarter, any related adjustment by the A/B MACs

(A) will be included on next quarter’s report. The CAHs must be sure to keep adequate

records to permit distribution of the HPSA bonus payment when received. If an area is

designated as both a mental health HPSA and a primary medical care HPSA, only one 10

percent bonus payment shall be made for a single service.